Portfolio Update – May 2026

General news

• On 01/05/2026, U.S. Treasury yields fell as weaker-than-expected economic data and easing oil prices shaped market sentiment, with first-quarter GDP growth coming in below forecasts and inflation remaining elevated based on the Fed’s preferred measure, while declines in Brent crude helped temper concerns after recent spikes driven by Middle East tensions; ongoing uncertainty tied to potential military action plans involving Donald Trump and continued disruption around the Strait of Hormuz are contributing to cautious investor outlooks despite signs of moderating growth.
• Oil prices rose amid ongoing volatility and geopolitical uncertainty, with Brent crude rebounding after hitting a four-year high as markets weighed tensions surrounding Donald Trump and the Iran conflict, including a looming deadline under the War Powers Resolution that could impact military involvement; despite a temporary ceasefire, risks remain elevated due to continued U.S. blockade measures, stalled negotiations with Iran, and uncertainty over access to the Strait of Hormuz, all of which are keeping energy markets on edge.
• On 02/05/2026, U.K. exports to the U.S. have dropped sharply—down nearly 25%—following tariff measures introduced by Donald Trump, with data from the Office for National Statistics showing declines in key sectors like automotive and a sustained trade deficit as imports rise, highlighting mounting pressure on British exporters from higher costs and weaker competitiveness despite limited tariff relief on items like Scotch whisky tied to the visit of King Charles III and Queen Camilla.
• On 05/05/2026, Tensions between the United States and Iran escalated sharply as a fragile ceasefire appeared close to collapsing, with the United Arab Emirates targeted by Iranian drones and missiles and U.S. forces engaging Iranian vessels in the Strait of Hormuz, prompting Donald Trump to issue strong warnings while launching “Project Freedom” to secure shipping routes; the renewed hostilities rattled global markets, pushing oil prices higher and equities lower amid fears of prolonged economic disruption despite ongoing ambiguity over the ceasefire’s status
• On 06/05/2026, The Reserve Bank of Australia raised interest rates back to 4.35% as it grapples with the difficult balance between controlling inflation and avoiding a recession, despite weaker economic growth forecasts and limited policy flexibility; the bank now expects sluggish growth through 2027 and a rise in unemployment, signaling that it is prioritizing keeping inflation expectations under control even as tighter monetary policy increases pressure on borrowers and the broader economy.
• On 07/05/2026, Oil prices climbed amid volatile trading as investors weighed the risk of renewed conflict between the United States and Iran, with Brent crude and U.S. crude futures rising on concerns that prolonged tensions and higher energy costs could weaken global growth and complicate interest rate decisions; while reports suggest both sides are nearing a diplomatic agreement that could reopen the Strait of Hormuz and ease disruptions, Donald Trump warned of intensified military action if negotiations fail, underscoring the fragile state of ongoing peace efforts.
• On 12/05/2026, Donald Trump said the fragile ceasefire between the United States and Iran is “on life support” after rejecting Tehran’s latest response to Washington’s proposal to end the conflict, highlighting growing tensions over the stalled reopening of the Strait of Hormuz and ongoing military incidents despite the truce; with both sides accusing each other of violations and recent clashes continuing across the region, uncertainty is rising over whether diplomatic efforts can prevent a renewed escalation.
• The Australia government is reportedly considering replacing the current 50% capital gains tax discount with an inflation-indexed system for crypto and other investments, a move that could significantly increase taxes on long-term gains for many investors by taxing real profits adjusted for inflation rather than offering a flat discount; critics argue the proposal may discourage investment in productive assets like businesses and shares while pushing more money into tax-advantaged housing, though supporters say investors would still remain motivated by strong potential returns despite the higher tax burden.
• On 13/05/2026, U.S. inflation accelerated in April as rising energy costs pushed consumer prices higher than expected, with data from the Bureau of Labor Statistics showing headline inflation reaching 3.8% annually and core inflation remaining well above the Federal Reserve’s target, driven by surging gasoline, shelter, apparel, and airline prices amid ongoing geopolitical tensions and elevated oil costs; the report also showed wages failing to keep pace with inflation, increasing pressure on households and reducing the likelihood of near-term interest rate cuts as markets begin to price in the possibility of future rate hikes.
• On 14/05/2026, U.S. wholesale inflation surged in April as the Bureau of Labor Statistics reported producer prices rising at their fastest annual pace in more than three years, driven largely by soaring energy costs linked to the Iran conflict but also reflecting broader price pressures across goods and services; the sharp increase in both headline and core producer inflation has intensified concerns that inflation is becoming more entrenched, reinforcing expectations that the Federal Reserve will keep interest rates elevated for longer and reducing hopes for rate cuts this year.
• Donald Trump and Xi Jinping began a closely watched summit in Beijing focused on easing tensions and addressing major global issues including tariffs, artificial intelligence, Taiwan, Iran, and rare earth supplies, with both leaders emphasizing the importance of stable relations between the world’s two largest economies; Xi warned about the historical risks of conflict between rising and dominant powers, while the meeting also drew significant attention due to the presence of senior officials and prominent business leaders such as Elon Musk, Tim Cook, and Jensen Huang.
• On 16/05/2026, Talks between Donald Trump and Xi Jinping highlighted both cooperation and lingering tensions, with Xi warning that mishandling Taiwan could seriously damage U.S.-China relations while both sides also signaled progress on trade stability, Iran discussions, and business ties; the summit reinforced a temporary trade truce ahead of its 2025 expiration, included reports of major commercial wins for companies like Boeing and Nvidia, and showcased closer coordination between U.S. political and business leaders as both countries seek to stabilize relations despite ongoing geopolitical rivalry.
• On 18/05/2026, Donald Trump intensified pressure on Iran by warning that “time is of the essence” and urging Tehran to “get moving” amid stalled negotiations over ending the conflict, the reopening of the Strait of Hormuz, and Iran’s nuclear program; with the U.S. maintaining a blockade on Iranian ports and oil prices remaining elevated due to the disruption in global energy flows, tensions continue to threaten both regional stability and the broader global economy.
• On 19/05/2026, Donald Trump intensified pressure on Iran by warning that “time is of the essence” and urging Tehran to “get moving” amid stalled negotiations over ending the conflict, the reopening of the Strait of Hormuz, and Iran’s nuclear program; with the U.S. maintaining a blockade on Iranian ports and oil prices remaining elevated due to the disruption in global energy flows, tensions continue to threaten both regional stability and the broader global economy.
• On 20/05/2026, U.S. Treasury yields surged as investors sold government bonds amid growing fears that inflation is accelerating again, pushing the 30-year Treasury yield to its highest level since 2007 and increasing expectations that the Federal Reserve may raise interest rates rather than cut them; rising oil prices linked to tensions involving Iran have intensified inflation concerns, while higher borrowing costs are beginning to pressure stock markets and raise worries about slower economic growth globally.
• On 21/05/2026, Oil prices dropped sharply after Donald Trump said negotiations with Iran were entering their final stages, raising hopes for a diplomatic resolution that could ease disruptions around the Strait of Hormuz; despite the market optimism, analysts warned that prolonged blockades or failed talks could still trigger severe supply shocks, with some forecasts suggesting oil prices could surge toward $200 per barrel in a worst-case scenario if the conflict escalates further.
• Minutes from the Federal Reserve’s latest meeting showed growing concern among policymakers that persistent inflation linked to the Iran conflict may eventually require interest rate hikes, with officials deeply divided over whether the next policy move should still lean toward cuts; the meeting marked the final one chaired by Jerome Powell before leadership transitions to Kevin Warsh, who is expected to face the difficult task of balancing elevated inflation, rising energy costs, and slowing economic momentum while defending a more optimistic outlook driven by productivity gains from artificial intelligence.
• On 22/05/2026, Global markets remain under pressure as escalating tensions involving Iran and the Strait of Hormuz drive oil prices above $100 a barrel, fueling inflation and raising fears of prolonged economic disruption. Central banks including the Federal Reserve and Reserve Bank of Australia are warning that interest rates may stay higher for longer as energy costs surge, while bond yields rise and growth forecasts weaken. Meanwhile, geopolitical uncertainty, U.S.-China tensions, and expanding crypto regulation and tokenization efforts are reshaping global markets and investor sentiment.
• On 23/05/2026, U.S. consumer sentiment fell to a record low in May as rising oil and gasoline prices linked to the U.S.-Iran conflict intensified inflation fears and weakened confidence in the economy. The University of Michigan’s sentiment index dropped to 44.8, while inflation expectations climbed sharply, reflecting growing concerns that higher energy costs could spread across the broader economy. At the same time, rising Treasury yields and signals from the Federal Reserve that interest rates may stay elevated have added to market volatility and recession worries.
• On 25/05/2026, President Donald Trump said the U.S. will not rush negotiations with Iran over ending the war and reopening the Strait of Hormuz, stressing that “time is on our side” while maintaining the naval blockade on Iranian ports until a final agreement is signed. The proposed deal would reportedly reopen the strait, reduce hostilities and restart nuclear negotiations, but it has faced criticism from Republicans including Mike Pompeo and Ted Cruz, who warn it could strengthen Iran financially and militarily. Benjamin Netanyahu also said any agreement must dismantle Iran’s nuclear capabilities and preserve Israel’s right to defend itself.
• On 26/05/2026, U.S. forces carried out what United States Central Command described as “self-defense” strikes in southern Iran, targeting missile launch sites and boats allegedly attempting to place mines, as tensions remain high despite an ongoing ceasefire. President Donald Trump said negotiations with Iran were progressing and claimed Tehran’s enriched uranium stockpile would eventually be surrendered or destroyed, though Iran has shown no sign of accepting those terms. Trump also renewed calls for Arab nations to join the Abraham Accords, while Pakistan rejected linking regional diplomacy to the Iran negotiations.
• On 28/05/2026, Oil prices climbed after fresh U.S. strikes in Iran renewed fears of further disruptions to shipping through the Strait of Hormuz, with Brent crude rising above $96 a barrel and WTI topping $90. The escalation followed reports that U.S. forces targeted Iranian military sites and intercepted drones viewed as threats to commercial shipping and American troops. Despite signs that Washington and Tehran may still be moving toward a deal, Citigroup warned that prolonged high oil prices are increasing broader inflation risks and pushing central banks toward a more hawkish stance on interest rates.
• Australia’s inflation rose less than expected in April, helped by the government’s fuel tax cut, though underlying inflation continued to climb as higher oil prices spread through the economy. Headline CPI increased 0.4% for the month and eased to 4.2% annually, below forecasts, while core inflation edged up to 3.4%, remaining above the Reserve Bank of Australia’s target range. Markets reacted by reducing expectations for another RBA rate hike, especially after unemployment unexpectedly climbed to 4.5%, suggesting the labour market may be softening. Despite easing fuel prices from the temporary excise cut, broader cost pressures linked to freight, construction and energy continue to keep inflation elevated.
• On 29/05/2026, U.S. inflation remained elevated in April, with the Federal Reserve’s preferred inflation gauge, the PCE index, rising 0.4% monthly and 3.8% annually, while core inflation held at 3.3%. Although monthly price increases were softer than expected, persistent gains in housing, services and gasoline suggest inflation pressures remain broad, likely keeping the Fed cautious on rate cuts. Economic growth also slowed sharply, with first-quarter GDP revised down to 1.6%, while consumer spending stayed resilient despite stagnant incomes and a falling savings rate. Markets now expect the Fed to keep interest rates elevated, with some traders even pricing in a possible rate hike in 2027 amid ongoing inflation risks tied to the Iran conflict and tariffs.
• On 30/05/2026, President Donald Trump delayed a final decision on a proposed US-Iran agreement after a White House Situation Room meeting, despite stating earlier that he would determine whether to approve the deal. Trump insisted Iran must permanently forgo nuclear weapons, fully reopen the Strait of Hormuz without tolls, and allow the destruction of enriched nuclear material, while also signaling that the US naval blockade could be lifted. However, Iranian state media disputed key elements of Trump’s description, claiming the draft agreement contains no provisions on toll-free passage or nuclear material destruction and instead focuses on the release of $12 billion in frozen Iranian assets. The uncertainty highlights ongoing tensions despite progress toward a 60-day ceasefire extension and renewed nuclear negotiations, with both sides continuing military posturing and exchanging threats even as oil prices eased on hopes of a diplomatic breakthrough.